11 February 2011: Nokia bets the company on Microsoft
Nokia, still the world's largest phone maker by volume, announced it would adopt Microsoft's Windows Phone as its main smartphone platform, abandoning its own software. Days earlier, CEO Stephen Elop's leaked memo had compared Nokia to a man on a burning oil platform. Investors were unimpressed and the shares fell double digits. Within three years Nokia sold its phone business to Microsoft.
The lesson: Switching to a weak partner's platform can accelerate the very decline it was meant to stop.
What it meant for investors
$1,000 in Nokia at the start of 2012 → $1,042 today, vs $5,312 in the S&P 500.
We start the clock at the start of 2012, the first year in our price data after the event. That is 1.0 times the money, but $4,271 less than a plain index fund made over the same years.
What Nokia teaches: Market dominance in a fast-changing technology can disappear within a few years, so a leader's past market share is no protection against a platform shift.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2012 | $4.80 | $1,042 | $5,312 |
| 2015 | $8.00 | $625 | $3,301 |
| 2018 | $4.70 | $1,064 | $2,519 |
green = beat the S&P 500 · red = lost money
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